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About us Members Positions Issue March 2016
Header March

Dear Reader,

The upcoming EIC Spring Conference with a workshop on New Digital Technologies for Construction and their Impact on Contractual Relationships is less than a month away.

Register online now for the event on 21-22 April 2016 in Berlin. 


Sincerely,
Your EIC Team

Headlines
EIC and FIEC submit Position Paper on Use of (un)fair Contract Conditions for Projects financed by the Connecting Europe Facility
Headlines

EIC and FIEC submitted a joint Position Paper to the EU Commission on “The Use of (un)fair Contract Conditions for Projects financed by the Connecting Europe Facility (CEF)” following a meeting with European Transport Commissioner Bulc. Read more...

EIC discusses draft of new standard form for Underground Works with Chairman of FIDIC/ITA Task Group 
Headlines

Members of the EIC Working Group Contract Conditions discussed the latest draft of the planned new FIDIC/ITA standard form of contract for Underground Works with the Chairman of the respective task group.
Read more...

EIC Working Group on CSR / Responsible Business Conduct: Kick-Off Meeting
Headlines

EIC is holding the kick-off meeting of its newly founded Working Group CSR / Responsible Business Conduct on 14 April in Frankfurt/Main. Read more...


News from Bruessels
EIC takes part in EC Workshop on Engagement with the Private Sector in the  Policy Forum on Development

EIC took part into the 3rd Workshop on Engagement with the Private Sector organised by the EU Commission in Brussels on the 14 March 2016. DG DEVCO highlighted the EU priorities such as reducing poverty, creating jobs and making investment less risky. Read more...

FIEC and EIC criticise revised EU proposal for an International Procurement Instrument

FIEC and EIC submitted a joint initial position paper to the European Commission criticising a number of aspects of the draft Proposal for a Regulation on the Access of Third-Country Goods and Services to the Union’s Internal Market in Public Procurement. Read more...


Multilateral & International Issues
EIC co-hosts World Bank Seminar on New Procurement Framework in Berlin 

EIC co-hosted a World Bank Business Outreach Seminar for European contractors, suppliers and consultants to familiarise them with the details of its New Procurement Policy Framework including the revised Guidelines. Read more...

EIC to submit position paper on Local Costs Provisions under the OECD Consensus

EIC proposes to revise the Local Costs Provision in the relevant OECD Arrangement and to develop a specific Sector Understanding on Large Construction and Engineering Projects. Read more...

Brief Notices

The ITA-AITES 2016 World Tunnel Congress

The annual World Tunnel Congress (WTC) will be held in San Francisco, California on 22-28 April 2016. Tunnelers representing owners, contractors, engineers and suppliers will be exhibiting and attending this event which includes up to 600 technical presentations and 250 exhibitors. Read more...


FIDIC 2016 International Infrastructure Conference

The 2016 edition of the FIDIC International Infrastructure Conference will be held in Marrakesh on 25-27 September with a focus on “Engineering for the Challenges of Climate Change” and explore Scenario Based Planning, Stakeholder Engagement, Consistency in Design and other criteria, Integrated Resource Management, Risk and Liability, and the looming Water Crisis. Renewables and Clean Energy will receive close attention, as will Designing for Disaster, with all its inherent risks.
Read more...

 
Headlines

EIC and FIEC submit Position Paper on Use of (un)fair Contract Conditions for Projects financed by the Connecting Europe Facility

Brussels   EIC and FIEC jointly submitted a Position Paper to the EU Commission on “The Use of (un)fair Contract Conditions for Projects financed by the Connecting Europe Facility (CEF)” following a meeting with the Cabinet of EU Transport Commissioner Violeta Bulc.

The joint paper was prepared by EIC following FIEC-EIC talks with Ms. Bulc’s Cabinet on 25 February in Brussels regarding unfair contract conditions in Poland. During the meeting, which was also joined by the European and global consulting federations EFCA and FIDIC, the four federations explained to the EU Commission that a specific tender in Poland very likely contravened the Connecting Europe Facilty Regulation.

CEF Regulation mentions the need for fair contract conditions

Thanks to the lobbying of EIC and FIEC, the CEF Regulation stipulates in Recital 65 that: “In order to ensure broad and fair competition for projects benefitting from CEF funds, the form of the contract should be consistent with the objectives and circumstances of the project. Contract conditions should be drafted in such a way as to fairly allocate the risks associated with the contract, in order to maximise cost-effectiveness and enable the contract to be performed with the optimum efficiency. This principle should apply irrespective of whether a national or international contract model is used”.

Since all projects financed by CEF are centrally managed by the Directorate General for Transport and Mobility (DG MOVE), EIC and FIEC are confident that their joint paper will be scrutinised by the competent experts in the Commission and might present substantial evidence in order to create a first precedent for an intervention of the EU Commission in a Polish road construction tender.

Links:
Joint FIEC/EIC Position Paper on Use of (un)fair Contract Conditions for Projects financed by CEF

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Headlines

EIC discusses draft of new standard form for Underground Works with Chairman of FIDIC/ITA Task Group

Berlin   Members of the EIC Working Group Contract Conditions discussed the latest draft of the planned new FIDIC/ITA standard form of contract for Underground Works with the Chairman of the respective Task Group. The conference call was held ahead of the forthcoming World Tunnel Congress to be held in San Francisco in April 2016.

Proposed new standard form based on FIDIC’s “Yellow Book”

It is foreseen that the proposed new standard form will be based on FIDIC’s “Yellow Book” but is to be published as a separate document. As far as tunnelling works are concerned, the Employer shall be obliged to provide not only Employer’s Requirements but a Preliminary Design which allow bidders to calculate their tender prices.

The tender dossier should comprise a ground classification system describing the measures the Contractor has to take in order to excavate and support the ground, so as to minimize claims and disputes. As the time for completion is largely influenced by ground conditions, the new standard form should regulate time adjustment according to actually encountered ground conditions.

Current state of drafting to be presented at World Tunnel Congress

The current state of drafting will be presented to a broader audience at the forthcoming World Tunnel Congress (22-28 April 2016 in San Francisco) where ITA’s Working Group on Contractual Practices will discuss the matter. The EIC Working Group Contract Conditions expects to meet again with the FIDIC/ITA Task Group leader before the summer break.

Links:
ITA/AITES 2016 World Tunnel Congress

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Headlines

EIC Working Group on CSR / Responsible Business Conduct: Kick-Off Meeting

Frankfurt/Main   EIC will be holding the kick-off meeting of its newly founded Working Group CSR / Responsible Business Conduct on 14 April in Frankfurt/Main.

The new Working Group is tasked to collect best practice examples and benchmarks on CSR activities of its (associated) member companies in international markets in order to put EIC in a position to respond to existing and future regulation on the European and international level and also to demands from NGOs.

EIC aims at presenting a position on the most important CSR aspects such as health & safety, transfer of know-how, supply chain management, engaging with stakeholders and clients, greening of construction operations, compliance with competition law.

An important part of any EIC statement will be to inform decision-makers at EU, OECD, World Bank and UN level about the wide range of activities of European international contractors in the field of CSR and to share respective best practice examples.

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News from Bruessels

FIEC and EIC criticise revised EU proposal for an International Procurement Instrument 

Brussels   FIEC and EIC submitted a joint initial position paper to the European Commission criticising a number of aspects of the amended proposal for a Regulation on the access of third-country goods and services to the Union’s internal market in public procurement and procedures supporting negotiations on access of Union goods and services to the public procurement markets of third countries, which was published on 29 January 2016. 

FIEC/ EIC fully support the European Commission's aim to create a level playing field in world procurement markets. However, both federations are concerned that the amended proposal will not achieve the intended result of reciprocal opening of third-country procurement markets. Both federations therefore ask for the withdrawal of the latest draft.

The rule of reciprocity is regulated in the GPA

FIEC and EIC argue that any contracting authority or entity, under the current EU “acquis communautaire”, may rely on the principle of reciprocity to decide not to accept third country bidders' participation in its tenders when those are not covered by EU commitments under the GPA or other international trade agreements. Therefore, contracting authorities of Member States must maintain in the future their authority to decree autonomously a prohibition on foreign bidders’ participation in their tenders as a legal right resulting from the EU’s membership in the WTO Agreement on Government Procurement (GPA).

If the principle of reciprocity governs the relationship between GPA signatories, then it must also apply between the EU and non-GPA members. Hence, FIEC and EIC oppose the amended EU draft Regulation to the extent that it proposes to oblige contracting authorities to accept bids originating from any third country and to limit possible restrictive measures to (at least for works contracts relatively modest) price penalties – now called “price adjustment measures” – at the unconditional discretion of the European Commission.

Links:
Joint FIEC/EIC Initial Position Paper

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News from Bruessels

EIC takes part in European Commission Workshop on Engagement with the Private Sector in the Policy Forum on Development 

Brussels  EIC took part into the 3rd Workshop on Engagement with the Private Sector organised by the EU Commission in Brussels on the 14th of March 2016. Opening the workshop, Mr Ridolfi, Director for Sustainable Growth and Development at DG DEVCO, highlighted the EU priorities such as reducing poverty, creating jobs and making investment less risky. He added that the EU Commission was creating a broader template to engage with the private sector which aimed at avoiding engaging the EU Commission´s reputation.

New Practical Partnership Arrangements with individual companies

Besides structured dialogues (such as African Business Forum, Regional B2B) and the ongoing development of financial instruments and Blending. DG DEVCO announced that the EU Commission was developing “Practical Partnership Arrangements” with individual companies. These arrangements aim at identifying a common interests in addressing one or several development goal(s). Talks between the EU Commission and a few interested companies have been engaged. Interested members companies are invited to contact the EIC secretariat for further information.

Focus of EU Blending on Renewable Energy and Agriculture

Concerning Blending, the EU Commission released first calls for proposal in February. Those calls mainly concern “ElectriFI” and “AgriFI”, two projects focusing on rural areas and presenting a high risk profile. According to Commission officials, there is no infrastructure project in the pipeline at the moment.

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Multilateral & International Issues

EIC co-hosts World Bank Seminar on New Procurement Framework in Berlin 

Berlin   The World Bank held a Business Outreach Seminar for European contractors, suppliers and consultants to familiarise them with the details of its New Procurement Policy Framework including the revised Guidelines. The event on 2 March 2016 was co-organised by EIC in co-operation with the German World Bank Office, the Federation of German Industries (BDI) and the Association of German Chambers of Commerce and Industry (DIHK).

Participants from more than 50 enterprises and organisations

Following an introductory statement by EIC World Bank Liaison Officer Uwe Krenz, World Bank Procurement Manager Enzo de Laurentiis guided participants from more than 50 enterprises and organisations through the main changes of the New Procurement Framework which is currently being implemented. Present EIC members included President Philippe Dessoy and contractors representatives from Belgium, Germany, Italy, Portugal, Spain and the United Kingdom.

Use of value-for-money criteria for contract award decisions

Mr. de Laurentiis underlined that the new regulations introduced more flexibility in the design of the procurement process to ensure that it is fit for purpose and appropriate to the size, value and risk of the project. He added that one of the fundamental pillars of the new framework was that it allowed the use of value-for-money criteria for contract award decisions. Another key point, according to de Laurentiis, was that the World Bank will now be stronger involved in the contract management. He added that the World Bank would also take a more pro-active stance to facilitate solutions in regard to contract-related complaints – although legally it was not a contract party.

Regarding the use of alternative procurement arrangements rather than the Bank’s Standard Procurement Documents, which the Bank’s new framework allows for, Mr. de Laurentiis said, that this was only possible if the entity in question had principles fully in-line with the World Bank's own core procurement principles such as Value for money, Integrity, Fit for purpose, Efficiency, Transparency and Fairness. 

Links:
Presentation: World Bank Procurement Framework & Business Opportunities

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Multilateral & International Issues

EIC to submit position paper on Local Costs Provisions under the OECD Consensus 

Berlin   EIC proposes to revise the Local Costs Provision in the respective OECD Arrangement and to develop a specific Sector Understanding on Large Construction and Engineering Projects.

Over the past decades, the restrictive amount of local costs which can be covered by export credit insurance has become a heavy burden for European construction and plant engineering exporters. The insurable amount of local cost is limited under the OECD Arrangement on Officially Supported Export Credits (the so-called “OECD Consensus”) to 30% of the export contract value.

At the initiative of EIC, the Business and Industry Advisory Council to the OECD (called BIAC) has called upon the Participants to the OECD Consensus in the latest OECD Consultation on Export Credits in November to review the local costs provision under the OECD Consensus. To accelerate BIAC’s lobbying activities, EIC is establishing an ad hoc EIC Working Group on this subject matter to elaborate more detailed arguments, examples and background information and comprise the EIC Position. 

The first meeting of the ad hoc Working Group is planned for end of April and interested contractors should contact the EIC Secretariat for further information.

Links:
EIC Draft Position on Local Costs Provision in the OECD Consensus

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Picture Credits: Gulermak, FIDIC, ITA/AITES, CSR - Corporate social responsibility by mattz90

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